Secure your portfolio with LIC stock in 2025: with 11.5% YoY growth: New target Rs 1,160

The Life Insurance Corporation of India (LIC), the largest insurer in the country and a debt-free company, has been recommended as a top pick for 2025 by Religare Broking. LIC, despite not belonging to the Maharatna, Navratna, or Miniratna categories, holds the position of the second-largest PSU stock in India by market share.

Why Invest in LIC?

Market Dominance and Strong Portfolio: LIC has an impressive market share of 58.87% in new business premiums as of Q2FY25, making it the largest domestic insurer. It offers a wide range of products, including participating insurance products and non-participating products such as unit-linked insurance, savings insurance, term insurance, health insurance, and annuity & pension products.

Premium Growth: In Q2FY25, LIC saw an 11.5% YoY growth in net premium income, reaching ₹1.20 lakh crore. This growth was mainly driven by a 23.8% YoY rise in single premium to ₹46,998 crore. LIC's strong product portfolio and extensive agency force have been key drivers of this premium growth.

Increasing Non-Par Products: LIC has significantly increased its share of non-participating (non-par) products, which have higher margins. The contribution of non-par products in individual APE rose from ₹967 crore to ₹3,164 crore, boosting their share from 11.1% to 27.7%. This focus on high-margin products is expected to further improve LIC's profitability.

Positioned for Success: LIC is well-positioned for continued success in the evolving insurance landscape. Its strategic focus on expanding its product mix and enhancing profitability through high-margin non-par products underscores its strong growth potential.

LIC Share Price Target

As of January 1, LIC's share price stood at Rs 896.40 apiece, up by 0.52% on BSE, with a market cap of Rs 5,66,972.79 crore. Despite significant corrections from its 52-week high of Rs 1,221.50, the stock is trading near its 52-week low of Rs 815.05. Over the past year, the stock has gained over 4.4% and has increased by at least 8.5% since its listing in May 2022. Religare Broking recommends a BUY in the range of Rs 840 to Rs 900, setting a target price of Rs 1,045-1,160 for 2025.

Dividend and Financials

In 2024, LIC paid an interim and final dividend of Rs 4 and Rs 6 per share for FY24, with ex-dates in February and July. LIC is the largest institutional investor in India, with total assets under management worth Rs 52.52 trillion (US$610 billion) as of March 2024.

LIC, a state-owned insurance group and investment company, continues to lead the market with its robust financial health and strategic growth initiatives, making it a secure addition to any investment portfolio in 2025.

Disclaimer: It is recommended to consult with a financial expert before making any investment decisions.